Forex – Yen Falls as BOJ Introduce Additional Stimulus

 Forex – Yen Falls as BOJ Introduce Additional Stimulus
imageForexMar 13, 2020 01:15AM ET

(C) Reuters.

By Alex Ho

Investing.com – The Japanese yen fell against the U.S. dollar on Friday in Asia after the Bank of Japan introduced an additional stimulus.

The USD/JPY pair lost 0.6% to 105.28 by 12:15 AM ET (04:15 GMT) as the Bank of Japan on Friday said it would buy 200 billion yen ($1.90 billion) of Japanese government bonds. The central bank also said it would inject an additional 1.5 trillion yen in two-week lending.

Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies slipped 0.1% to 97.377.

In an effort to prevent potential freezes brought on by the COVID-19 novel coronavirus, the U.S. Federal Reserve offered a huge injection of liquidity to the Treasury market overnight. It is looking to provide trillions of dollars in temporary loans to the banking system in coming weeks while at the same time purchasing a broader range of government securities.

The U.S. central bank delivered an emergency half percentage-point cut last week and some expect further moves when they meet next week.

Goldman Sachs (NYSE:GS) said today it now expects the Fed to cut by 100 basis points at the meeting, down to a range of 0% to 0.25%, in “light of the continued growth in coronavirus cases in the U.S. and globally, the sharp further tightening in financial conditions, and rising risks to the economic outlook”.

Meanwhile, the University of Michigan will release its preliminary measure of March consumer confidence at 10:00 AM ET today.

The consumer sentiment index is expected to drop to 95 from 101 in February, according to economists’ forecasts compiled by Investing.com.

The EUR/USD pair gained 0.3% to 1.1212 even after the European Central Bank (ECB) surprisingly announced that it was not cutting rates. Instead, the ECB introduced measures to support bank lending and expanded its asset purchase program by 120 billion euros ($135.28 billion).

The AUD/USD pair was up 1.1% to 0.6304. The NZD/USD pair also rose 0.9% to 0.6139.

Forex – Yen Falls as BOJ Introduce Additional Stimulus

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